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Market Review, Commodities, Currencies, Economic & Corporate Update - 21.06.24

Published 2024/06/21, 09:03
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007540
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5803
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7211
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1099
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, amid loss in banking sector stocks.
  • Lenders, Absa Group (JO:ABGJ), Nedbank Group (JO:NEDJ) and Standard Bank Group (JO:SBKJ) dropped 5.5%, 1.6% and 1.2%, respectively.
  • Property developers, Vukile Property Fund (JO:VKEJ), Lighthouse Properties (JO:LTEJ), Equites Property Fund (JO:EQUJ) and Attacq (JO:ATTJ) declined 5.1%, 4.2%, 3.8% and 3.2%, respectively.
  • Retailers, Foschini Group (JO:TFGJ), Pick ‘n Pay Stores (JO:PIKJ), Cie Financiere Richemont SA (JO:CFRJ) and Mr Price Group (JO:MRPJ) shed 4.0%, 1.9%, 1.6% and 1.4%, respectively.
  • On the flipside, platinum miners, Northam Platinum (JO:NPHJ) and Anglo American Platinum (JO:AMSJ) advanced 4.4% and 3.4%, respectively.
  • The JSE All Share index declined 0.8% to close at 80,073.05.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, after the Bank of England (BoE) kept its key rates unchanged as expected.
  • Miners, Fresnillo (LON:FRES), Antofagasta (LON:ANTO) and Glencore (LON:GLEN) advanced 4.4%, 4.3% and 1.7%, respectively.
  • Real estate companies, Land Securities Group (LON:LAND), Barratt Developments (LON:BDEV) and Berkeley Group Holdings (LON:BKGH) gained 4.4%, 1.7% and 1.3%, respectively.
  • Banks, NatWest Group (LON:NWG), Standard Chartered (LON:STAN) and Lloyds Banking Group (LON:LLOY) rose 2.6%, 1.9% and 1.6%, respectively.
  • On the other hand, retailer, Ocado Group (LON:OCDO) plunged 12.1%, after the company announced halt in a deal to open robotic warehouse for Canadian supermarket chain Sobeys and that their tie-up were no longer exclusive.
  • The FTSE 100 index advanced 0.8% to close at 8,272.46.

US MARKET REVIEW

  • US markets ended mostly lower yesterday, weighed down by losses in chipmaker stocks.
  • Retailer, Kroger (NYSE:KR) dropped 3.3%, after the company issued weaker earnings outlook for 2Q24 as pressures on profits in its pharmacy business continue.
  • Meanwhile, it reported better-than-expected 1Q24 results..
  • On the contrary, technology companies, Salesforce (NYSE:CRM), International Business Machines (NYSE:IBM) and Cisco Systems (NASDAQ:CSCO) advanced 4.3%, 2.0% and 1.6%, respectively.
  • Energy companies, Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) both gained 2.2%, each.
  • The S&P 500 index fell 0.3% to settle at 5,473.17, while the DJIA index advanced 0.8% to close at 39,134.76.
  • The NASDAQ index eased 0.8% to end the trading session at 17,721.59.

ASIA MARKET REVIEW

  • Asian markets are trading lower this morning, after Japan’s inflation data for May came in slightly cooler than expected.
  • In Japan, electric wires and cables, Fujikura (TYO:5803) has declined 3.5%.
  • On the flipside, automobile company, Mitsubishi Motors (TYO:7211) has gained 1.3%.
  • In Hong Kong, automobile company, Li Auto (NASDAQ:LI) has shed 2.4%.
  • On the other hand, pharmaceutical company, Sinopharm Group (HK:1099) has advanced 1.8%.
  • In South Korea, food company, Sempio Foods (KS:007540) has surged 14.7%.
  • On the contrary, engineering company, Charm Engineering (KS:009310) has dropped 3.8%.
  • The Nikkei 225 index is trading marginally lower at 38,626.95.
  • The Hang Seng index has eased 1.7% to trade at 18,025.65, while the Kospi index is trading 0.8% lower at 2,783.93.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.2% to trade at $85.58/bl.
  • Yesterday, Brent prices rose 0.8% to settle at $85.71/bl, amid drop in crude oil inventories. The US Energy Information Administration (EIA) reported that the US crude inventories fell by 2.55mn bls in the week ended 14 June 2024.
  • At 05:30 SAST today, gold prices marginally advanced to trade at $2,360.49/oz. Yesterday, gold gained 1.3% to close at $2,359.63/oz, as recent US economic data raised hopes for rate cuts from the US Fed this year.
  • Yesterday, copper declined 0.1% to close at $9,646.35/mt. Aluminium closed 1.5% higher at $2,521.65/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In the US, the number of people filing for initial jobless claims fell less than expected in the week ended 14 June 2024. Moreover, both, housing starts and building permits declined in May to their lowest levels since mid-2020.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 9.68%, while that for the longer-dated 2040 issue fell to 11.86%.
  • At 05:30 SAST, the US dollar is trading 0.3% lower against the South African rand at R17.938, while the euro is trading marginally higher at R19.2437. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R22.7384.
  • Yesterday, the euro mostly declined against most of the major currencies. In Germany, annual producer price index (PPI) unexpectedly dropped in May. In the eurozone, the consumer confidence index improved for a fifth consecutive month in May, as the European Central Bank (ECB) cut its key interest rates for the first time in five years.
  • At 05:30 SAST, the euro advanced 0.1% against the US dollar to trade at $1.0717, while it has gained 0.1% against the British pound to trade at GBP0.8466.

ECONOMIC UPDATES

  • The Bank of England (BoE) kept its key interest rate unchanged at 5.25%, in line with market expectations.
  • In the UK, the GfK consumer confidence rose to a level of -14.00 in June, more than market expectations for a rise to a level of -16.00. The GfK consumer confidence had recorded a level of -17.00 in the prior month.
  • The Swiss National Bank (SNB) cut its key interest rate by 25 bps to 1.25%, in line with market expectations.
  • In Germany, the producer price index (PPI) unexpectedly remained flat on a MoM basis in May, compared to a rise of 0.2% recorded in the previous month.
  • In the eurozone, the consumer confidence index rose to a level of -14.00 in June, less than market expectations and compared to a level of -14.30 recorded in the prior month.
  • In the US, building permits dropped 3.8% on a MoM basis in May, compared to a drop of 3.0% recorded in the previous month.
  • In the US, initial jobless claims fell to a level of 238.00K in the week ended 14 June 2024, less than market expectations for a drop 235.00K. The initial jobless claims had recorded a revised level of 243.00K in the previous week.
  • In the US, housing starts dropped 5.5% on a MoM basis in May, compared to a revised rise of 4.1% recorded in the prior month.
  • In Canada, the new housing price index rose 0.2% on a MoM basis in May, in line with market expectations. The new housing price index had recorded a similar rise in the prior month.
  • In Japan, the consumer price index (CPI) rose 2.8% on a YoY basis in May, compared to a rise of 2.5% recorded in the prior month.
  • In Japan, the Jibun Bank manufacturing PMI unexpectedly declined to a level of 50.10 in June, compared to a level of 50.40 in the prior month.
  • In Japan, Jibun Bank services PMI fell to a level of 49.80 in June, compared to a level of 53.80 in the previous month.
  • In Australia, the Judo Bank manufacturing PMI unexpectedly dropped to a level of 47.50 in June, compared to a level of 49.70 recorded in the prior month.
  • In Australia, the Judo Bank services PMI eased to a level of 51.00 in June, compared to a level of 52.50 recorded in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Standard Bank Group Limited (JO:SBKJ): The banking and financial services company, in its trading update for the five months ended 31 May 2024, revealed that group’s headline earnings grew by low-to-mid single digits. Income growth was supported by higher average interest rates and higher client transactional volumes but dampened by lower trading revenues. As expected, credit impairment charges were marginally higher period on period. Higher charges in Business & Commercial Banking and Personal & Private Banking (PPB) were partially offset by lower charges in Corporate & Investment Banking (CIB). Moreover, the company intends to release its financial results for the six months to 30 June 2024 on 15 August 2024.
  • Nampak Limited (JO:NPKJ): The packaging company, in its 1H24 trading update, revealed that it expects loss per share from total operations to be between R10.50 and R12.50, as compared with R838.82 recorded in the previous year. Also, it expects HEPS to be between R30.00 and R34.00, as compared with R115.24 recorded in the prior year. Moreover, the company intends to release its unaudited interim results on or about 28 June 2024.
  • Sirius Real Estate Limited (JO:SREJ): The real estate investment trust company announced that it has completed the acquisitions of two industrial assets in the UK, in Banbury, South East England, and Wembley, for just over GBP31.00mn, representing a 9.2% net initial yield including acquisition costs. Separately, the company announces that it has notarised the disposals of two sub scale assets located in Hartlepool and Letchworth, UK, for a combined total of GBP1.90mn.

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